A CITY church today declared “war on Wonga” as it launched a new credit union scheme to offer affordable loans and mortgages as an alternative to payday borrowing.
The project will give those struggling to make ends meet the chance of easier access to cash at reasonable rates and help them avoid payday lenders notorious for extortionate interest rates.
The trailblazing City of Edinburgh Methodist Church in Nicolson Square has formed a partnership – the first of its kind in Edinburgh – with the long-established Capital Credit Union to help churchgoers and the wider community, which launches tonight
As with all credit unions, members are required to save a set amount each week before the money is pooled and loaned out at low interest rates.
Weekly workshops will be held at the church, run by church staff and specially trained church volunteers.
Methodist minister the Rev Belinda Letby said the church was revolting against “predatory payday lenders”.
She said: “As a church, we see every day how tough times have been over the last few years for our members – and not only for them, but for their families and the community around us.
“We want to help protect people from predatory payday lenders, who seem to offer a quick way out, when in reality they not only prolong but exacerbate the problem. The wonderful thing about credit unions is that all members save, so they will always have something to fall back on. This, more than anything else, is why we have set up the credit union, because we believe that by working together we can help prevent problems before they even arise.”
Pioneer minister Lou Davis said the church wanted to serve the community in a broad sweep of ways – not just spiritually.
She said: “We believe the help we offer should be health, wellbeing, social and financial as well as spiritual.
“The credit union offers people a choice and it’s a very good choice, with low interest rates in comparison to those offered by payday loan companies.”
Marlene Shiels, chief executive of the Capital Credit Union, said: “We are incredibly proud to be in a position to work with the City of Edinburgh Methodist Church in this way. Credit unions are built on the ethos of people helping people, and this is a perfect illustration of our philosophy in action.”
Meanwhile, the Methodist Church in Scotland is forging new links with the Church of Scotland and the Church of England to launch the Churches’ Mutual Credit Union on October 1. It is aimed at members of the clergy but will be available to all “active members” of the the denominations.